Facebook may have to sell GIF- maker giphy on uk competition concerns

NEW DELHI: Britain might require Facebook to sell GIF website Giphy after the country’s competition regulator said on Thursday its investigation found the deal between the 2 companies would hurt the display advertising market.

Facebook, the world’s largest social media company, bought Giphy, an internet site for creating and sharing animated images, or GIFs, in May last year to integrate it with its photo-sharing app, Instagram. The deal was pegged at $400 million by Axios.

The UK’s Competition and Markets Authority (CMA) began a search into the deal in January, and in April referred the deal to an in-depth investigation.
“Giphy’s takeover could see Facebook withdrawing GIFs from competing platforms or requiring more user data so as to access them. It also removes a possible challenger to Facebook,” said Stuart McIntosh, chair of the independent investigation for the CMA.

Another major provider of GIFs is Google’s Tenor.

The CMA found that, before the Facebook deal, Giphy was considering expanding its paid advertising services offered within the us to other countries, including the united kingdom . However, Facebook terminated Giphy’s ad partnerships following the deal, consistent with the regulator.
“We afflict the CMA’s preliminary findings, which we don’t believe to be supported by the evidence. As we’ve demonstrated, this merger is within the best interest of individuals and businesses within the UK – and round the world,” a Facebook spokesperson said.

The representative added that the California-based company would still work with the CMA. Giphy declined to comment This is not the primary time the CMA has raised concerns about major deals. The $9.2 billion eBay-Adevinta deal has caught its attention, and therefore the CMA has asked the new owners of supermarket chain Asda to repair fuel competition concerns.

The watchdog said that it’s engaged with other agencies reviewing the deal to assist the CMA’s investigation, and is now inviting comments from interested parties by September 2 for its provisional findings.